FISCA ACTION

Your comments matter. Tell the CFPB your story!

You and your customers have the right to be heard. Your story is important – NOW more than ever. Tell the CFPB why you oppose the rules because you and your customers depend on small loans and credit for American families.

the CFPB NEEDS TO HEAR: Credit Strengthens Communities

Customers get the info they need and easy action steps here.

Customers can contact the CFPB today and tell them, “Don’t take my credit away!” Give this link to your customers, print it on statements or send in emails. Friendly and helpful, go here to protect rights to short-term credit.

Last Friday, the CFPB’s proposed payday loan rule and RFI were published in the Federal Register. When they were issued in June, the proposal and RFI had comment deadlines of, respectively, September 14, 2016 and October 14, 2016.

In the version published in the Federal Register, the comment deadline for the payday loan proposal was extended to October 7.

However, October 14 remained the comment deadline for the RFI in the published version.

April 12, 2016

CFPB Official Clarifies Projected Rulemaking Dates

Monday at a Practicing Law Institute conference in New York. Diane Thompson, a manager in the CFPB’s Office of Regulations, clarified the CFPB’s current expectations regarding when it plans issue a number of its widely anticipated rules.

Thompson indicated that the CFPB expects to issue the following:

1. ‘Proposed rules’ on payday loans before summer or by early summer.

2. A larger participant rule for auto title and installment loans later this year. Thompson suggested that the two types of loans would be handled either in a single larger participant rule or at least be addressed at the same time.

3. Final rules on prepaid products by early summer. Thompson’s statement is consistent with the report last week in Politico that the final rule had been pushed back until later this spring.

April 4, 2016

On April 4, at the Practicing Law Institute’s (“PLI”) 21st Annual Consumer Financial Services Institute in Manhattan, Alan Kaplinsky (a co-chair of the institute) moderated a panel entitled “The CFPB Speaks,” where CFPB officials shared their own insights on industry trends on their radar, priorities for the coming years, and views on certain hot-button issues. On the panel from the CFPB were Anthony (“Tony”) Alexis (Assistant Director for Enforcement), Jeffrey Langer (Assistant Director for Installment Lending and Collections Markets), Diane Thompson (Managing Counsel, Office of Regulations), and Peggy Twohig (Assistant Director for Supervision Policy).

During the discussion, the CFPB panelists gave us their hopes on the timetables for new rules that the CFPB is promulgating. They indicated that debt collection rules may be forthcoming in late spring, that the payday lending rules will “hopefully” come out before summer, that the arbitration rules may come out in late spring or early summer, that overdraft rules should be issued in late summer, and that prepaid card rules will be promulgated in “early summer.”

March 8, 2016

According to Politico, “sources familiar with the discussions” have indicated that the CFPB will not issue a proposed rule for payday (and other small-dollar, high-rate) loans until later this Spring., 2016.

In remarks to the National Credit Union Association, Director Cordray discussed the proposals the CFPB is considering for small dollar loans. In March 2015, in anticipation of convening a SBREFA panel, the CFPB issued an outline of the proposals it was considering for payday (and other small-dollar, high-rate) loans (“Covered Loans”). For both “short-term” Covered Loans and those considered to be “longer-term” under the proposals, lenders would be allowed to make Covered Loans using either an ability-to-repay (ATR) analysis or without an ATR analysis but subject to significant restrictions.

Director Cordray indicated in his remarks only that the CFPB is continuing to consider giving lenders ATR and non-ATR options and revealed no changes in the CFPB’s approach to Covered Loans from that outlined to the SBREFA panel.

Nov. 23, 2015

The CFPB released its Fall 2015 rulemaking agenda last Friday. The agenda sets the following timetables for key rulemaking initiatives:

Payday and deposit advance loans: In April 2015, the CFPB convened a SBREFA panel to review the proposals it is considering for payday (and other small-dollar, high-rate) loans. The Fall 2015 agenda estimates the issuance of a Notice of Proposed Rulemaking in February 2016 “after additional outreach and analysis.” The Spring 2015 agenda had estimated that a proposed rule would be issued “later in 2015.”

Prepaid financial products: In November 2014, the CFPB issued a proposed rule for prepaid financial products, including general-purpose reloadable prepaid cards and certain digital and mobile wallets. The Fall 2015 agenda estimates the issuance of a final rule in March 2016. The Spring 2015 agenda had estimated that a final rule would be issued in January 2016.

Overdrafts: The CFPB issued a June 2013 white paper and a July 2014 report on checking account overdraft services. In the Fall 2015 agenda, the CFPB states that it “is continuing to engage in additional research and has begun consumer testing initiatives related to the opt-in process.” Although the Spring 2015 agenda had estimated an October 2015 date for further prerule activities, the new agenda moves that date to January 2016.

Debt collection: In November 2013, the CFPB issued an Advance Notice of Proposed Rulemaking concerning debt collection. In the Fall 2015 agenda, the CFPB states that “it is in the process of analyzing responses to a survey seeking information from consumers about their experiences with debt collectors and is engaged in qualitative testing to determine what information would be useful for consumers to have about debt collection and how that information should be provided to them.” The agenda estimates that further prerule activities, which are expected to involve the convening of a SBREFA panel, will occur in February 2016. The CFPB had estimated in its Spring 2015 agenda that further prerule activities would occur in December 2015.

Larger participants: In its Spring 2015 agenda, the CFPB confirmed that is considering a “larger participant” rule for “consumer installment loans and vehicle title loans.” In the new agenda, the CFPB states that it is “also considering whether rules to require registration of these or other non-depository lenders would facilitate supervision, as has been suggested to the Bureau by both consumer advocates and industry groups.” (Pursuant to Dodd-Frank Section 1022, the CFPB is authorized to “prescribe rules regarding registration requirements applicable to a covered person, other than an insured depository institution, insured credit union, or related person.”) While the prior agenda estimated a January 2016 date for prerule activities, the new agenda estimates a September 2016 date.

Small business lending data: Dodd-Frank Section 1071 amended the ECOA to require financial institutions to collect and maintain certain data in connection with credit applications made by women- or minority-owned businesses and small businesses. Such data include the race, sex, and ethnicity of the principal owners of the business. In the Fall 2015 agenda, the CFPB estimates a September 2016 date for prerule activities. (We recently blogged about the CFPB’s efforts to hire an Assistant Director to lead the interdisciplinary team that the CFPB is in the process of standing up to implement Section 1071.)

URGENT & IMPORTANT INFO

OUR CEO AND COO URGE YOU TO ACT NOW. WE WANT TO HELP YOU AVOID SERIOUS PROBLEMS WITH THE CFPB.

The Dodd-Frank Wall Street Reform and Consumer Protection Act was passed July 21, 2010. It is sweeping legislation affection almost every part of the nation’s financial services. But, what does it mean to me, as a business owner?

Basically, Dodd-Frank set consumer financial protection as a national priority and established the CFPB. What began as a focus on large banks and the mortgage industry has grown into much more. The CFPB is also taking on small banks, non-bank entities, college loans, credit cards, overdraft fees, collections, car dealer and rental businesses that extend credit and lend to customers, and much more.

For the payday, title loan, check cashing, installment lending and internet lending businesses, the CFPB has every one of you in its sights – regardless of how big or small, with one location or in multiple/multi-state locations, and everything in between.

As rules are being announced in 2016 and then probably enacted in 2017 or soon after, we strongly urge our clients and colleagues in these businesses to:

1. Put compliance software into place. It is an affordable and manageable way to put measures into place that will help keep you in business. Yes, we have software. Yes, we developed the software for you because we know this is going to affect you. We already hear client stories about getting CFPB questionnaires and other inquiries. Being prepared is always the best strategy.

2. Continue to turn to eCASH as rules become effective. We will be incorporating changes into our eCASH software. We promise to make it as easy and as integrated as possible in the go-forward. We are here for you. Based on our personal experience, we certainly understand your concerns.

From the Introduction of the reportDrawing on its research, market monitoring, supervisory, and enforcement experience, the Consumer Financial Protection Bureau (Bureau) has serious concerns that lender practices in the markets for payday, vehicle title, and similar loans are causing substantial harm to consumers. Accordingly, the Bureau is considering rule making to prevent the types of consumer injuries that result from lenders extending short-term and longer-term loans with payments that a consumer cannot afford to repay. The Bureau is also considering proposals to address harms that may arise from certain lender practices in collecting repayment from a consumer’s checking, savings, or prepaid account.